Question

. During the year, T purchased the items shown below. Indicate which item qualifies for both 179 limited expensing and bonus depreciation

a. A new computer used to monitor his investment    b. A new office building to be used in his business

c. A truck purchased from XYZ corporation, which had used it in its sand and gravel business

D New office furniture for the new office building                             e. none

Show all work , thank you

Answer 1

b is ruled out as Section 179 expense is not available for office building c) This is also ruled out as used vehicles are not covered by Bonus depreciation

a and d both qualify under Section 179 expense and bonus depreciation.

Note - Computers must be used at least 50% of the time in your business to be eligible for bonus depreciation. Since the computer is being used to just monitor investments, it may not qualify under bonus depreciation.

Best answer - D.